Beyond the red tape

March 14, 2019

Print edition 24: Employment

— The Jobs Edition

Words: Josh Fanning

Research: Johnny von Einem

The Small Venue Licence and Renew Adelaide led to a bit of a jobs boom in the CBD.

Every city is for lease. Some parts of the city are for sale and others are free. Property can be private on a public street; it can be leased to tenants who build pride and value in a neighbourhood or – what seems to be easier – it can be left vacant and contribute to the negative perception of an area. Property and its use contributes to the overall health, vitality and worth of a city.

More than anything else over the past decade, the establishment of Renew Adelaide and the Small Venue Licence found viable workarounds and changed legislation to create opportunity and value on streets where previously there was none.

Property is capital; it is not a consumer good and therefore does not respond in the same way to market forces such as supply and demand. A property owner is loathed to reduce rents as a means to attract tenants because lowering rents affects their balance sheet with the bank. In many cases property owners have loans against the existing value of their property. The value is determined by the amount of rent they charge. Reduce the rent – reduce the value of the property.

So rents stay high and shops stay empty.

Renew Adelaide fixed this problem first in Adelaide by finding loopholes in leases that allowed landlords to grant access to their buildings without affecting the value of the property. Pioneered by Marcus Westbury in Newcastle first, Dr Ianto Ware brought the Renew model to South Australia.

Renew Adelaide grants rolling 30-day leases to aspiring tenants, the effect of which means empty shops become populated by people, those people tidy up the place, keep the footpath clean, invest a modicum of money and a whole lot of time in the property and – most importantly – employ themselves. Renew Adelaide has become a start-up incubator for bricks-and-mortar businesses and many of the most successful have since converted to paid tenants for progressive landlords and property owners.

Renew Adelaide didn’t change anything but an attitude. It changed the way landlords and bureaucrats worked with potential business owners to say ‘yes’ instead of ‘no.’ Renew Adelaide fixed the social contract between private property and public good, it put people in buildings rather than keep them out.

Very different to Renew Adelaide, the small venue licence was a response to outdated legislation that disallowed restaurants from serving food at a bar. Essentially, the only venue you were allowed to eat a meal and drink a wine at the bar was a Hotel (or ‘pub,’ as we know them).

This ancient and ridiculous classification was too difficult to change, so the then-Labor Government consulted with art venues, live music venues and aspiring hospitality entrepreneurs to create a new classification of license, that couldn’t be objected to, was capped at 120 people and could only operate until 2:00AM.

The result has been a boom in beautiful small bars, a higher level of experience for Adelaide diners and drinkers, a multitude of jobs from bartenders through to cleaners, graphic designers, architects and more. The craft spirit (ie: South Australian gin) and craft beer explosion dovetails with the emergence of these small venues – venues that aren’t locked into contracts with mega breweries and alcohol companies.

The very nature of the licence has encouraged new networks, independent producers and products to increase and provide more and more jobs as small businesses grow and succeed. What’s interesting about the data above is where these two initiatives have failed to take hold in the city and the corresponding issues those areas have with vacant properties.

Renew Adelaide and the Small Venue Licence both challenged the status quo and found a way through stagnant legislation and bureaucracy to invent entirely new categories of business and uses of property. The result is an undeniable jobs boon in Adelaide and a broader boost to our self-esteem as a city and state.